Top 5 Items Trending in Freight Transportation

Top 5 Trends To Watch For In Freight Transportation 

The Freight Transportation industry is seeing some big changes in 2015. Here are the top 5 trends to watch unfold.

1. Low Energy Prices will continue for much of 2015

Crude oil prices have dropped by 50%. The downturn is being driven by the determination of the Saudis, the largest low cost producer of crude oil, to take market share from the oil sands producers whose costs are much higher. Crude oil prices will remain at these levels, or even lower levels, throughout 2015 as a result.

2. Canadian Exports to the US will increase in 2015

Low energy prices will have a profound effect on the Canadian economy in 2015. Canadian manufactured goods will become more attractive to our closest and largest trading partner, the US. However, US goods will become much costlier to buy for Canadians. Watch for the balance of freight with the US to continue to evolve, and for the Canadian manufacturing industry, largely based in Ontario and Quebec, to have a record year.

3. Dimensional Pricing comes to the LTL Industry

Change is coming to the LTL freight industry in the form of dimensioning machines that precisely calculate the amount of space a shipment will occupy in a trailer, making the pricing process much more precise. UPS Freight and FedEx Freight have used dimensioners in their parcel operations for decades. Old Dominion Freight Line has used dimensioning equipment since 2009, YRC Worldwide Inc., and many of the other leading players in the LTL sector will surely follow.

4. More Mergers and Acquisitions will Drive E-Commerce Growth

E-commerce is going to be a bigger part of future supply chain services. 2014 ended with two big deals designed to enhance the e-commerce capabilities of industry giants, FedEx and CH Robinson.

FedEx Corp. agrees to buy logistics firm GENCO, a specialist in handling product returns, as e-commerce operations expand for the world’s largest cargo airline operator. Retail e-commerce is replacing the traditional business-to-business deliveries that once drove sales at shipping companies like FedEx and United Parcel Service Inc.

C.H. Robinson acquired Freightquote.com, Inc., a privately-held freight broker, Freightquote is one of the largest internet-based freight brokers in the US.

5. Shipper-Carrier Collaboration will continue to Evolve

As customers continue to demand a higher level of service reliability, shippers are placing greater importance on carriers with high transit time consistency, higher equipment availability, more flexibility, and multi-modal capabilities. Carriers and shippers need to align their processes and people in more strategic ways to reduce costs and increase service efficiencies.

Source: Canadian Shipper, January 2015, Dan Goodwill

http://www.canadianshipper.com/blogs/major-trends-shaping-freight-transportation-industry-2015/